Thursday, September 15, 2016

Romanian Bitcoin Exchange Shuts Down

 

Romania's first order-book exchange is closing down.

Statements on the BTCXchange website informed users of a possible sale of the service on 18th August, and on 4th September, users were asked to withdraw funds ahead of an expected 12th September shut down.

According to Romanian news source Bihon, it remains unclear whether the exchange, the first of its kind in Romania, is still for sale. Owners originally said they would accept offers on the platform through 16th September.

In past statements, owner Horea Vuscan expressed his hope the exchange would be acquired as he said it was "highly profitable", though he expressed reservations about continuing in the face of the Bitfinex hack and continued worries about the security of bitcoin exchanges.

Vuscan wrote:

"I believe that Romania needs a local exchange but I want to retire in this area of business. In conclusion, in respect of clients and community BTCXchange announce that is for sale."

The decision marks the second time the bitcoin exchange has shut its doors, following a service stoppage in late 2014. However, it's unlikely many customers will be affected by the decision.

Data shows trading volumes on the exchange were low prior to its closure, with the exchange seeing just 19,000 RON (roughly $48,000) in trades over the last seven days

Tuesday, September 13, 2016

EU's Top Cop Launches Digital Currency Working Group

 

Europol, the European Union's top law enforcement agency, has co-founded a new working group dedicated to digital currencies.

The initiative is being co-led by Interpol, the intergovernmental organization focused on law enforcement issues, and the Basel Institute on Governance, a non-profit group focused on financial crimes in the public and private sectors.

The working group, according to an announcement last week, will involve the organization of collaborative workshops and a global network comprised of subject matter experts.

Europol said in a statement:

"Internet technologies become continuously more advanced, and so do the ways in which criminals utilize them for their illicit and illegal activities. Among these technologies, digital currencies are already transforming the criminal underworld."

Europol and Interpol have spent much of the last year collaborating on digital currency issues, a partnership that has seen the two groups organize conferences and training sessions directed at global law enforcement representatives.

More recently, Europol inked a deal with blockchain startup Chainalysis in a bid to expand its capacity for tracking digital currency transactions.

In Race for Bitcoin Mining Profits, Fortune Favors the Old

 

New research has found that unless the price of bitcoin goes up, there will be little room for new miners to compete.

In "Minting Money With Megawatts", released this September, Sveinn Valfells of Flux, Ltd and Jón Helgi Egilsson of the University of Iceland conduct a broad analysis of the health of transaction processing on the open public blockchain, ultimately finding that the network could be headed toward further consolidation and centralization.

Once a hobby for tech-enthusiasts, the aim of the study was to determine the profitability of bitcoin mining following July's halving, a scheduled network change at which the rewards given to bitcoin miners dropped from 25 BTC to 12.5 BTC.

Notably, the researchers found that it is now only possible for new miners to profit when the price of bitcoin is above $600, a figure that was nearly double what it was before the halving.

To determine this figure, the researchers analyzed whether a new mining operation could remain small while still generating profit.

Profitability gap

Because the addition of new hashrate to the network alters how hard it is to generate the reward, the researchers also analyzed how much hashrate could sustainably be added to the network.

In this case, new miners can only add about 16% before difficulty increases would make them unprofitable. This worries the researchers, as this narrow gap for profitability doesn't impact incumbents nearly as much as new miners.

The writers explain that legacy miners have already made a capital investment to build out their mining operation. Therefore, a reduction in revenue only becomes a concern if their operational costs are greater than the amount of money they're bringing in.

They write:

"Existing miners have no reason to turn off their equipment even after the block reward has halved to 12.5 BTC … incumbents enjoy a clear advantage over new entrants."

While a new miner has to worry about the cost of both the new hardware they've purchased as well as their operational costs, legacy miners only need to worry about the latter.

This gives legacy miners the ability to operate in a low-margin environment that might not support a new miner.

Spectre of centralization

In sum, the researchers view this development as problematic because it could ultimately lead to further consolidation by incumbents, which the authors believe could open the network to consolidation and attack.

If new miners can't participate in the network, the larger operations become an increasingly larger part of the total network, creating the opportunity for mining operations to do harm to the network.

Fortunately, the researchers believe that Moore's Law may be able to prevent this problem.

Because electricity is one of the biggest costs for any bitcoin miner, if hardware power efficiency can double every three years, the researchers predict the minimum required price for new entrant profitability could drop to $530.

This increase in power efficiency would also make it possible for the network to support an additional 25% of hashrate before difficulty made new miners unprofitable, rather than the 16% it currently can handle.

Should Moore's Law continue beyond just the next doubling of power efficiency, it appears that there might be a market for new entrants for some time.

Monday, September 12, 2016

Two Big Factors Are Driving Up Bitcoin Prices

 

The price of bitcoin rose close to 10% this week, pushing higher as bullish market sentiment and low liquidity created an ideal environment for gains.

The digital currency enjoyed notable increases during the week, surpassing $600 on Sunday, 4th September, while largely avoiding any significant pullbacks or corrections.

Sentiment is so strong "players are not willing to bet against the rise of BTC/USD," according to Petar Zivkovkski, director of operations for Whaleclub.

He told CoinDesk:

"New short position openings are almost at all-time lows, [which] indicates that the market expects a continued rise."

Tim Enneking, chairman of cryptocurrency investment manager EAM, sees similar forces propelling the current market.

"Sentiment is generally bullish," he added.

Fast start, bullish sentiment

Bitcoin prices had a fast start during the week, opening at $571.68 on 2nd September before surging 4.9% to $599.60 the following day, according to CoinDesk USD Bitcoin Price Index (BPI) data.

While the digital currency tested $600 and failed to break through that resistance, it surpassed that key psychological barrier on Sunday, 4th September, before rising to an intra-day high of $612.39, additional BPI figures reveal.

The digital currency's price surged more than 6% over the weekend of 3rd and 4th September. Market sentiment was strongly bullish during these two days, data provided by leveraged bitcoin trading platform Whaleclub reveals.

Long exposure – as measured by the size of open positions – was 88% on Saturday and 87% on Sunday.

Confidence, which measures the percentage by which a particular day's position sizes were larger than average, registered 86% on 3rd September and 87% on 4th September, according to additional Whaleclub figures.

Additional figures from BFXData reveal that during the period, the value of long bets, as measured by USD margin funding, significantly exceeded the value of short wagers as measured by BTC and LTC margin funding.

Priming the pump

Bitcoin enjoyed these sharp gains and bullish sentiment after the digital currency ranged sideways for several weeks following the hack of exchange Bitfinex, Zivkovkski told CoinDesk.

During this time, trading volume was limited as many market participants took a pause in the aftermath of the Bitfinex hack. Bitcoin transactions totalled 7.82m in the seven days through 8th September, Bitcoinity data revealed.

This period of range-bound trading "lasted for several weeks, during which the market was 'powering up' – behind the scenes, traders were opening positions, betting almost equivalently on a price rise vs a price decline, often on margin," he said.

These substantial speculative bets, coupled with low trading volume, left the market highly susceptible to short and long squeezes. In this environment, a purchase of less than 600 BTC, executed by one or more market participants, was all that was needed to trigger a short squeeze, Zivkovski stated.

Jacob Eliosoff, a cryptocurrency investment fund manager, emphasized that the sharp rally that took place over the weekend required both a notable purchase and short squeeze which forced speculators to close out short positions.

"This weekend's rise was much too sharp to represent just gradual recovery," he told CoinDesk. "A short squeeze can turn a small rise into a big jump, but it can't turn a flatline into a jump."

After bitcoin's sharp gains over the weekend, the digital currency traded between $600 and $615 on 5th, 6th and 7th September, BPI figures reveal.

During this three-day period, the market was 86.3% long on average. Confidence was also high, averaging 84.3% over the three days.

Bitcoin breakout

The digital currency broke out of this malaise on Thursday, 8th September, when it surged more than 2% to a weekly high of $628.75, BPI data show.

Once again, a short squeeze was the likely culprit, stated Zivkovski, emphasizing the price movement took place during a time of low trading volume and did not coincide with any notable news catalysts.

In the near-term, the market could experience further short squeezes, as Zivkovski told CoinDesk on 9th September that "the current market is quite illiquid."

"Existing short positions are being cleared out as price continues to rise. Shorters are closing their positions at a loss and re-opening longs or simply staying out of the market for a while," he said.

Because the market is so illiquid, the situation "places price at the mercy of players with larger firepower"

The Trend Towards Blockchain Privacy: Zero Knowledge Proofs

 


One of the bigger trends in the blockchain world, particularly when it comes to financial services and specifically capital markets operations, has been a need for privacy and confidentiality in the course of daily business. This has meant that blockchain solutions are being designed with this primary need in mind. This has led to all the private blockchain solutions being developed today.

When you build for privacy and confidentiality there are tradeoffs that come with that. Mainly you lose transparency, which was the major feature of the the first blockchain: bitcoin. As originally designed, a blockchain is a transparency machine. In this system, the computers are distributed and no one entity controls the network. Not only this, but anyone can be a validator and anyone can write to or read from the network. Clients and validators can be anonymous and all the data gets stored locally in every node (replication). This makes all transaction data public.

The security of bitcoin is made possible by a verification process in which all participants can individually and autonomously validate transactions. While bitcoin addresses the privacy problem by issuing pseudonymous addresses, it is still possible to find out who's addresses they are through various techniques.

This is the polar opposite of what is happening in the private blockchain world, where decentralization and transparency are not deemed as necessary for many capital markets use cases.

What is important is privacy and confidentiality, latency (speed) and scalability (able to maintain high performance as more nodes are added to the blockchain). Encrypted node-to-node (n2n) transactions mean only the two parties involved in the transaction receive data. In many of these systems there are opt ins for third party nodes (regulators) to be a part of the transaction.

Other systems being developed for similar purposes, which have been written about on this blog, have one designated block generator which collects and validates proposed transactions, periodically batching them together into a new-block proposal. Consensus is provided by a Generator that applies rules (validates) agreed to by the nodes (chain cores) to the block and designated block signers.

In these systems, decentralization is simply not necessary because all the nodes are known parties. In private blockchains the nodes must be known in order to satisfy certain regulatory and compliance requirements. The focus has been on how to preserve privacy and confidentiality while achieving speed, scalability, and network stability. Therefore, there are ways for legal recourse even between parties who don't necessarily trust each other.

Strong, durable cryptographic identification

What are cryptography and encryption?

As noted above with privacy and confidentiality being pivotal, encryption has become a major focus for all blockchains. Many of these solutions are using advanced cryptographic techniques that provide strong mathematically provable guarantees for the privacy of data and transactions.

In a recent blog post titled "A Gentle Reminder About Encryption" by Kathleen Breitman of R3CEV, she succinctly provides a great working definition:

"Encryption refers to the operation of disguising plaintext, information to be concealed. The set of rules to encrypt the text is called the encryption algorithm. The operation of an algorithm depends on the encryption key, or an input to the algorithm with the message. For a user to obtain a message from the output of an algorithm, there must be a decryption algorithm which, when used with a decryption key, reproduces the plaintext."

If this encryption uses ciphertext to decrypt this plaintext, you get homomorphic encryption and this (combined with digital signature techniques) is the basis for the cryptographic techniques which will be discussed in this post. Homomorphic encryption allows for computations to be done on encrypted data without first having to decrypt it. In other words, this technique allows the privacy of the data/transaction to be preserved while computations are performed on it, without revealing that data/transaction. Only those with decrypt keys can access what exactly that data/transaction was.

Homomorphic encryption means that decrypt(encrypt(A) + encrypt(B)) == A+B. This is known as homomorphic under addition.

So a computation performed on the encrypted data when decrypted is equal to a computation performed on the encrypted data.

The key question being asked is: How can you convince a system of a change of state without revealing too much information?

After all, blockchains want to share a (change of) state; not information. On a blockchain, some business process is at state X and now moves to state Y, this needs to be recorded and proved while preserving privacy and not sharing a lot of information. Furthermore, this change of state needs to happen legally, otherwise there is a privacy breach.

Cryptographic techniques like zero knowledge proofs (ZKPs), which use different types of homomorphic encryption, separate:

1) reaching a conclusion on a state of affairs

2) the information needed to reach that state of affairs

3) show that that state is valid.

The rest of this post will discuss how the trend towards privacy has led to cryptographic techniques, some old and some new, being used to encrypt transactions and the data associated with them from everyone except the parties involved. The focus will be on Zero Knowledge Proofs, zk SNARKs, Hawk, confidential signatures, state channels and homomorphic encryption.

The privacy problem on a blockchain is the main gap for deployment for all of the cryptographic solutions talked about below.

Outside of a blockchain, there are examples of homomorphic encryption in practice. CryptDB is an example of system that uses homomorphic encryption and other attribute preserving encryption techniques to query databases securely. It is used in production at Google and Microsoft amongst other places.

It does have limitations though: you have to define the kinds of queries you want ahead of time and it is easy to leak data. CryptDB provides confidentiality for data content and for names of columns and tables; however CryptDB does not hide the overall table structure, the number of rows, the types of columns, or the approximate size of data in bytes. One method CryptDB uses to encrypt each data items is by onioning. This allows each data item to be placed in layers of increasingly stronger encryption.

Confidential signatures

Gregory Maxwell designed a cryptographic tool (CT) to improve the privacy and security of bitcoin-style blockchains. It keeps the amounts transferred visible only to participants in the transaction. CT's make the transaction amounts and balances private on a blockchain through encryption, specifically additively homomorphic encryption. What users can see is is the balances of their own accounts and transactions that they are receiving. Zero knowledge proofs are needed to demonstrate to the blockchain that none of the encrypted outputs contain a negative value.

The problem with Confidential Transactions is that they only allow for very limited proofs as mentioned above. zkSNARKs and Zero Knowledge Proofs (ZKPs) which will be described in detail below, allow you to prove virtually any kinds of transaction validation while keeping all inputs private.

Wednesday, September 7, 2016

Why the Winklevoss Brothers Are Still Waiting for a Bitcoin ETF …

 

The Winklevoss Bitcoin Trust may be inching closer to becoming the first bitcoin ETF listed on a major stock exchange, but that potentially historic date could be further off than some might think.

Announced three years ago by investors Tyler and Cameron Winklevoss, the Winklevoss Bitcoin Trust continues to draw attention, despite delays. As it would trade baskets of shares tied to real bitcoins, retail investors have long seen its approval as a boon for the price of bitcoin and the ecosystem as a whole.

It turns out, though, that even in spite of imminent deadlines that suggest approval may be forthcoming, a real decision could still be months away.

After spending two years trying to get listed on Nasdaq, the effort picked up momentum in June when the Winklevoss brothers filed to move their application to the BATS exchange. Within two weeks of that change, SEC assistant secretary Jill Peterson opened a comment period as part of the approval process.

A 45-day period that started with that filing is set to elapse at the end of this week.

But according to analysts, the publication of the form on the Federal Register didn't kick off a 45 day "clock,"

IBM Hopes to Combine Blockchain and AI

 

Robo-advisors are one of the most prominent future prospects for the financial sector. Being able to invest in exciting companies and products through an online conversation sounds very attractive.

But artificial intelligence is not sufficient to give proper investment advice. IBM wants to integrate the blockchain into artificial intelligence, and have created a new business unit centered around this concept, with robo-advisers just one of the many exciting prospects. 

Robo-Advising Needs More Than Just Artificial Intelligence

The way robo-advising works is as follows; consumers are given advice by a "robot' through a chat platform. In most cases, financial service providers will rely on artificial intelligence (AI) to provide advice. By using machine learning and deep learning, the AI software can "learn" and be given a more humane appeal to platform users.

The concept of AI has been attracting a lot of attention in the Fintech world. Both emerging and established financial service providers are experimenting with the technology. But some industry experts such as IBM, feel AI alone will not be sufficient and have created a new business unit to merge blockchain technology with artificial intelligence.

Industry Platforms Business, as this new venture is

Tuesday, September 6, 2016

Microtransactions on the Blockchain

 


The web as a tool of international collaboration has brought us closer than ever before. Commerce happens by the minute across borders and continents in bits and pieces with ease that has been unprecedented so far. This age of extreme productivity and constant connectivity has opened doors to people of all classes, races and backgrounds unlike innovations earlier which were accessible initially only to the rich and elite few. . Tools like Email, IM and social media has helped bring the world closer and enabled the transfer of information. However, the transfer of money has been highly monopolized by a few elite bodies and banking bodies and governments have largely limited innovation and disruption in the space. For decades after the advent of internet, innovation in the financial space was almost non existent. In the early 2000’s start­ups like Paypal tried disrupting the digital payment space with their gateways and digital wallets but they were still heavily reliant on existing infrastructure offered by banks and were limited by the strict regulations placed upon them by the government.

When Satoshi Nakamoto released his white paper on Bitcoin in 2008, he set the precedence for a financial revolution. Released during the tmie of the recession, the paper was a silent outcry against the control imposed upon the financial system around the globe by the elite and those in power. Decentralization at its core, gave power to the people and empowered them to do business without interference of governing bodies.. The technology laid basis for empowering over 5 billion individuals to transfer and receive money without having to depend upon external agencies. From banking and remittance to accounting, Bitcoin has disrupted the financial space unlike anything that came before it. Probably, the last time we witnessed something , this powerful in nature was when we found the power of compound interest in growing an individual’s savings.

However, like with all innovation, Bitcoin too came with its share of problems. Unfair distribution, confirmation times that took forever and the ridiculously large blockchain size makes it unappealing to the average user. This is reflected by the fact that inspite of over 5 years of incredible PR coverage and marketing, there are only about 100,000 users globally for Bitcoin as of today. Added to this is the fact that the technology is not built for scale. This paper, proposes the user cases for an emerging wtechnology (Bitshares) via experiences created within its tipping tool (btstip.io). It has been written to show prospective stakeholders and shareholders, the importance of what we are building at freebieservers and how we see possibilities to solve problems in varying sectors with our products .

Why Bitshares
While Bitcoin itself solves a large number of problems with remittance in the digital space and empowering the average individual to be able to send and receive money without going through the hassles of dealing with a third party, it is not the final product that will lay basis for our financial futures. The blockchain will be a key component of how money is remitted and saved in the years to come, but it might not be on the Bitcoin blockchain due to its inability to scale with the requirements of the average consumer. We chose to go with Bitshares for its ability to tackle some of the key pressing issues with Bitcoin at the moment. Like, with every other product we have developed so far, scalability and consumer utility at markets of varying backgrounds were of pressing concern to us. Following are some of the reasons why we chose to go with Bitshares over Bitcoin

Confirmation times.
The internet has always been about ease of access and speed. If the technology does not serve the purpose of empowering the average user to conduct business in a fashion that’s fast enough, then whatever we build on top it will be borderline useless. The world does not have ten to thirty minutes to confirm transactions every time one of us sends or waits to receive cash. In the existing system, individuals are expected to wait upon confirmations before they can move ahead with the transactions. This does not make sense in real life user cases such as cafeterias or concerts where transactions are to be done in real time. Bitshares, in comparison offers confirmation in a matter of 10 seconds and comes with virtually no wait time. It combines the ease of using existing wallets like Paypal with the power of a verifiable blockchain. This comes heavily handy in the case of micro­transactions are individuals are not usually looking forward to wait for 30 minutes for a matter of few dollars because it is literally not worth their time. Bitshares empowers us to circumvent this issue easily with its quick transaction confirmation times.

Transaction Frequency
With the advent of micro­transactions in the ecosystem we are looking at handling transaction frequencies in volumes we have never witnessed before. Ideally, we have organizations, entities and individuals simultaneously passing tokens in troves to large groups of people. This means, ideally the system should be cut out to handle more than 10 transactions per second (Bitcoin). When we look at Bitshares, we see a system that allows us to conduct over 100,000 transactions per second without the nuances of having to establish a privately controlled database which will not be verifiable by the end user through means of a blockchain. The fact that the system is readily available to perform at scale gives us confidence in going ahead with the chain as it will be a system we can rely upon even if the project rampantly attains scale and garners users at unexpected rates like some of our other projects​.

Transaction costs
When orienting a platform for micro­transactions a key component of what ensures its success is the amount of money put into its transaction fees. One of the basic reasons why banks haven’t been able to enable start­ups to empower micro­transactions be it within apps or on websites is the heavy costs of transfers charged by them. Similarly, the remittance markets haven’t truly been able to deliver to hard working migrants because of the fact that they literally eat up 20­30 percent of the money sent from hard earned wages in foreign markets.

Our reasoning behind going with Bitshares for this project includes the low transaction costs involved with Bitshares. At 40 Bitshares per transaction, we are literally looking at costs as low as 1/4th of that of Bitcoin. This helps us empower the average user even in the remotest of regions from growing economies to send and receive cash without fear of losing money in the process. What needs to be noted is that, while someone from a stronger economy might not bother about losing a couple dollars on each transaction, people from a weaker economy will lose their minds over losing a few dollars on every in­bound transaction as that could literally be the size of their daily wage. By ensuring transaction costs are kept at an all time low we can ensure the product is built for people from all kinds of backgrounds and ensure we are built for a global user base.

Product Specifications:
At its core, btstip.io is built to be a marketing tool developed to ensure the average user knows what the benefits of using Bitshares are in comparison with existing systems of money transfer. This is a joined effort by Freebieservers, Beyond Bitcoin and CCEDK and is done as a part of our efforts to build the community around Bitshares. As a business entity, freebieservers is not looking to retain ownership or hold back on equity as we believe, a business like this needs to be owned by the community and this is a part of our efforts to ensure our marketing prowess is used to further the cause of low cost, quick remittance via the blockchain.

In the current iteration of the product, the tipbot empowers the average user to send, receive and hold tips through avenues like the forum, mumble, twitter, reddit and facebook. We are one of the first communities to have a tipping system integrated right into the forum. This goes a long way in ensuring we garner . new users for Bitshares as individuals now have the ability to send and receive digital tokens without having to sign up for a seperate wallet or go through the nuances of utilizing a bank transfer to attain bitshares.

Key features

Forum integration
The product has been built in partnership with the administrators of the forum to empower the existing community to send and receive funds on the forum without having to go to an external site. We offer the ability to link the tip bot account with their forum account and empower users to send funds either through a private message or right on the forum. In doing so, freebie has created history in the cryptosphere by developing a bot that works with forum software. In addition, the bot is able to send funds to batches of users within the forum, further eliminating the requirement of investment of time to send funds to batches of users. Our intent is to empower companies and individual entities to be able to do a distribution of tokens within threads and thereby ensure activity on the forum. In addition, enabling tipping on the forum helps reward individuals that contribute content of good quality and thereby substantially improves the quality of posts on the forum over a period of time.

Social Media Integration
A large part of activities on the internet occur via social media and we find it a requisite to have a strong integration of the product into social media to ensure the average user
gets a chance to use it without having to enter the forum or doing much research into crypto­currencies. The intent of integrating the product right into varying social media platforms is to ensure we grab the eyes of individuals where they least expect us. In the current iteration of the product we are linked with facebook, reddit, twitter and mumble to grab the eyes of unexpecting users. The idea is to empower organizations to be able to distribute their tokens along with news or discussions pertaining to them. This should further ensure the end user has an opportunity to try the product without requiring much knowledge of cryptocurrencies or having to go with the nuances of setting up a wallet or undergoing similar difficulty. We intend to have the product being directly linked with the social media accounts of users so that people can transfer funds with user names and not alpha­numeric characters like those of Bitcoin. This is in lien with the bitshares philosophy that user names should be in a fashion that is recognizable by the average end user and not solely a string of characters that makes it excessively difficult for humans to remember easily.

Link Generation for transfers
One of the core components of the product’s current iteration is the ability to generate unique links that allow users to retrieve funds once they have access to it. This should allow users to remit money by privately sharing URL’s with anyone that deserves tipping. The idea behind this is to empower anyone to send cash via platforms like E­mail and mumble without having to do much development on the external product. This plugs in perfectly with apps and websites that require awarding users for certain behaviour. For instance, instead of paying an advertiser for garnering the attention of a possible end consumer, brands could directly reward the user for completion of a survey or partaking in a beta test of the product. In addition, this feature could be used to plug in to mobile apps that enable users to “unlock? tokens on reaching certain levels and further imprints our philosophy of integrating gamification into the development of solid products that make a “dent? in the lives of people

Exchange integrations.
At a base level we intend to work directly with CCEDK and openledger for the
integration of a fiat gateway and to empower users to exchange their assets to bitshares and bitcoin while on the move. In doing so we are creating a user experience that requires much lower level of expertise in using and centralizing work that was earlier dispersed across multiple platforms while ensuring we retain the decentralization offered by platforms developed on the blockchain.
Ideally, we have CCEDK as our banking partner and will be able to empower users to convert their received tips into fiat and withdraw to their bank accounts, anywhere in the globe. Similarly, they should also be able to convert fiat currency into tippable tokens on the platform in a short period of time. In addition, we are also looking to work with the Nanocard offering by CCEDK to ensure people can access their funds at any ATM or spend online in real time. This should further enhance the usability of the forum by a large extend and ensure we garner users in troves to the platform. We intend to develop Btstip.io as one of the most “open�? exchanges when it comes to linking with financial services and exchanges from around the globe as the end goal is not solely profiteering but rather building a beautiful user experience for the end user.

User Issued Assets and Token delivery
The platform is currently fine tuned to be assisting owners of organizations or users issuing assets on the blockchain to freely distribute their tokens to interested parties at will without having to go through the nuances of working on setting up a wallet for bulk distribution. In the current iteration of the product, we are all set and ready to distribute tokens on the forums and social media platforms and we’ll begin with distribution of brownies during our beta tests. This is done in order to ensure a larger distribution of the tokens in question and to empower organizations to reach out to prospective investors and stake holders in pursuit of onboarding them. In addition, this also gives coins that use the same chain an opportunity to distribute themselves amongst a larger user base and thereby garner its first batch of early adopters.

Anticipated Features
Note : The following are features we may or may not be completely involved in developing. The existing fund raiser is for completion of the fore­mentioned features and server maintenance for
a year. Since we are letting go of ownership, we believe, while we are absolutely capable of pulling off the features mentioned below, we should have the community on boarded and a larger amount of resources before we pursue them. The following is a roadmap to consumer acquisition that could (possibly) be followed under the right financial circumstances.

Crowd funding
The internet has often displayed mankind’s ability to join hands and support massive endeavours to push ourselves to a better future. Platforms like kickstarter has empowered the average user to donate to causes that appeal to to him or her and thereby make capital readily available as and when required. However, limitations imposed by banks and government entities have limited individuals for far too long when it came to providing capital for projects that were deemed interesting by non conventional users. Had it not been for crowd­funding projects like Pebble would have never come to existence. Similarly, the power of crowd funding can be garnered to empower artists and developers that have never had a chance to display their work the masses earlier due to non availability of capital. We intend to develop the platform into an all in one crowd funding platform that enables users to gather funds for user cases that require capital and involvement of a large number of individuals around the world. It will be a combination of blockchain technology, kickstarter and a basic banking infrastructure (provided by CCEDK) to empower, anyone from anywhere in the world to readily be able to invest or gather funds for projects in an (almost) decentralized fashion. Our intention is to combine the ease of remittance on the blockchain with innovations from around the globe and empower entrepreneurs and innovators to create what they desire with capital input from across continents. Since the remittance itself would happen on the blockchain, it would be cheap, accounted for and verifiable by anyone having access to the internet. It should also substantially decrease the entry barriers involved in setting up a crowd funder and thereby empower people without access to a banking infrastructure, especially in third world economies to raise funds

In­game integrations
Currently, freebie as an entity is in ownership of a gaming service that caters to close to 200,000 “free? users on a monthly basis. We are in the process of expanding to a game item marketplace and an e­sports venture in the months to come. Our intention is to use the blockchain for majority of the transactions and league competitions we’ll be hosting in order to educate gamers about the ease of holding cash and remittance on the
blockchain. Keeping in lieu with our commitment of building communities and empowering community leaders to better engage with their members, we intend to further encourage users to share tokens that will then be usable on our list of websites for services ranging from free game servers to games, game items and bets. Combining this ecosystem with offerings like CCEDK’s nanocard should allow gamers to have access to a fiat system that allows them to cash out their game earnings without having to go through the nuances of using a bank

Mobile Remittance
One of the key markets blockchain technology is anticipated to disrupt is remittance. In the current iteration of the product we have already integrated with a mobile gateway to ensure people are empowered to send money through text messages. Ideally, we have a system where anyone is able to send money across the world with a text message. By creating gateways that permit people to exchange their tokens to fiat currency around the world, we can empower individuals to garner the benefits of low cost remittance over the blockchain and go around the nuances of having to depend on a third party.

Profiles
Profiles on the platform are to be a means of creating a portfolio of work by individuals who depend on public funding for their work. Profiles can be maintained by individuals, organizations or bands looking to display their work and sell or raise funds as and when required. The profile will be a single place for individuals to track funds raised and remain accountable for the work they do with it. Keeping in line with our philosophy of transparency, investors will be able to track the movement of funds and profile holders will be able to “tag? the transfer of money with what they spent it on.

Verified Non profit listings
As a means to ensure non­profit’s doing wonderful work have ready capital availability when needed, we will partner with organizations around the globe and attempt to ensure capital availability for teams that are doing a wonderful job around the world. Our goal is to permit non profit’s to hold accounts linked with a verified bank account (held by them) and exchange and send funds via CCEDK. Individuals will then be able to send cash to organisations trying to solve problems they seem important to themselves. The idea is to provide linkages to organizations via blockchain and empower users to fund the organizations that interest them without much involvement from third parties. The only major role we’ll have as a platform will be in terms of educating the organizations about the importance of garnering funds on the blockchain and helping them set up fiat gateways for their exchanges. In addition, in the event of a disaster or crisis that affects a large number of individuals, we could have listings for causes and thereby garner and send funds to the last mile, thereby ensuring the globe can truly join hands and pool resources and send it to places where its most needed at.

Apps
As a gaming enterprise, Freebie has always had its eyes set on expanding to Mobile. In addition to empowering remittance through phones, we intend to create systems that allow game and app developers to charge for their services via the blockchain and also issue tokens for games through bitshares. This should permit them to leverage the low cost of utilizing the blockchain with the intuitive user experiences of having a real time payment system that works with ease. Ideally, we could release API’s that can be readily plugged into the system, then have a fiat gateway integration so that app developers can issue tokens and redeem payments with utmost ease. This could be of immense use in growing economies where the required banking infrastructure for such systems are not yet in existence. This will empower an entire generation of entrepreneurs to garner an income from their apps even if the existing banking infrastructure does not permit them to do so.
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California Pension Fund Considers Blockchain Opportunities

 


Board members of the California Public Employees' Retirement System (CalPERS) recently took part in a discussion on blockchain technology as part of a broader conversation about future investment opportunities.

The meeting is notable given the size of CalPERS, which manages just over $300bn in assets, making it the largest public pension fund of its kind in the US.

As previously reported by journalist Brian Cohen, the meeting (which took place in late July) featured a presentation by Jesse McWaters of the World Economic Forum. McWaters provided an expansive look at the current pace of development around the blockchain and FinTech, followed by a question-and-answer session from attendees.

Interestingly, CalPERS itself already has some exposure to the bitcoin and blockchain industry, albeit indirectly.

In 2009, the pension fund invested $200m in Kholsa Ventures, a Silicon Valley-based venture capital fund, and gave an additional $60m to a seed stage-focused fund run by Kholsa. Just over two years ago, Kholsa led a funding round for blockchain startup Chain, and the fund has also invested in Blockstream, 21 Inc and BlockScore.

Other public pension funds outside of the US have explored investments in the space. Earlier this year, the venture arm of the Ontario Municipal Employees Retirement System (OMERS) took part in a funding round for VC firm Digital Currency Group.

Whether CalPERS moves to more directly invest in the industry remains to be seen. However, recent reporting suggests that the pension fund hasn't had the best luck with its venture capital efforts. Struggling performance overall may dampen its appetite for riskier investments amid poor economic conditions.

Bank Veterans Raise $1.5 Million for Digital Asset Startup

 


Digital asset trading service Crypto Facilities has announced a $1.5m seed round led by Pamir Gelenbe's AngelList syndicate.

Already operating with a license from the UK's Financial Conduct Authority, the company plans to use the money to add new products and cryptocurencies to the site, grow its workforce and work more closely with US regulators.

Co-founder and CEO, Timo Schlaefer told CoinDesk:

"For us it's really expanding the platform by adding additional products, assets, derivatives. Just giving people more tools to use. We are still relatively narrow with bitcoin futures, but we are looking to scale."

Over the coming six-to-nine months, Schlaefer said the London-based firm plans to hire a "handful" of new employees, mostly developers.

Currently, the firm is an Appointed Representative (AR) of Met Facilities LLP, authorized and regulated by the Financial Conduct Authority, but doesn't serve US customers. The company also intends to spend some of the investment to work with both US and European regulators.

Launched last year, the company, founded by veterans of Goldman Sachs and BNP Paribas, quickly made its mark in the industry. In February it partnered with Ripple to build an XRP derivative to go live later this month. The company also negotiated a deal with Chicago-based derivatives marketplace, CME Group to build two bitcoin price benchmarks designed to help manage the risk of bitcoin investments. CME is currently valued at $36bn.

It was that partnership, along with over $150m in bitcoin derivatives trades for private clients, investment banks and hedge funds that first attracted lead investor Pamir Gelenbe's whose portfolio already includes the Kraken digital currency exchange.

A lot with a little

In conversation with CoinDesk, Gelenbe, who syndicated a group of about a dozen backers on AngelList to lead the investment, said it was Crypto Facilities' ability to accomplish so much without outside investment that first caught his attention.

But what finally convinced him to back startup was the passion of the founders and the relative size of the bitcoin derivatives market compared to traditional derivatives.

"In any mature derivatives market the trading of derivatives dwarfs compared to the trading of stocks," said Gelenbe. "We haven't seen that yet happen in bitcoin, but we expect to see that in the future."

Until now Gelenbe says institutional investors have been shy about investing in bitcoin because of the "hassles of storage and security." But as new opportunities arise, he expects that will change.

He concluded:

"Those people just want to be able to trade derivatives without having to hold the product."

The investment is part of a slow trend among bitcoin startups to attract institutional investors. Also in the works are multiple bitcoin ETFs, including SolidX, which in July initiated the process of listing on the New York Stock Exchange and the Winklevoss Bitcoin Trust which is currently waiting on final approval from the Securities Exchange Commission.

Also participating in the round is Playfair Capital, String Ventures, hedge fund veteran Lee Robinson and Digital Currency Group, the parent company of CoinDesk.

Monday, September 5, 2016

Yours Wants to Take Bitcoin Mainstream by Targeting Non-Bitcoin Communities

 

Former Reddit Cryptocurrency Engineer, Ryan X. Charles, is currently working on a new, bitcoin-powered social network, but he isn't focused on creating something that will only be used by the Bitcoin community. In a recent interview on Epicenter Bitcoin, Charles noted that creating an app used by a mainstream audience would have much more value than simply creating /r/Bitcoin with micropayments.

Charles's new platform is called Yours and the main goal is to create a way for content creators to get paid for their digital content directly from their audiences. Although he used to work at Reddit, Charles has noted that Yours is not simply a decentralized version of that social media platform.

Finding a First Non-Bitcoin Community for Yours

During the interview, Charles made it clear that Yours is currently searching for the first key community or demographic that the platform should try to attract. "I'm sort of vague about this now, but who are our core users?" he questioned. "What is community number one here?"

The reason Charles is somewhat vague on this point is because Yours has not yet identified the community that they should target first. Although many people within the Bitcoin community have heard of Yours, this is very much an unknown project among the general public and even among the general tech community.

Some think it would make sense to first focus on the Bitcoin community as a core batch of users, but Charles was quick to dismiss this idea. "If we made Reddit but with Bitcoin, I bet Bitcoin users would use it; however, I don't think it's in anybody's interest that we do this first." said Charles. "Bitcoin users would probably most benefit from it if we create something mainstream."

"Everybody in the Bitcoin space wins if we start servicing people outside the Bitcoin community," Charles added.

Charles's argument is essentially that they'll learn much more about what they're building if they go after a community that is unrelated to Bitcoin. This way, Yours will be better able to understand whether they're solving a real world problem or just creating another Bitcoin community forum. By going this route, Yours will also be able to ensure that their platform is not so complex that it can only be used by bitcoiners.

"I think it's really important that we identify one community to be our core audience [who] are not already Bitcoin users," concluded Charles.

The Manga Example

Manga was the one area of interest that Charles brought up as an example of a community that may be interested in using Yours. "I'm not a big manga fan, but there are a lot of reasons why we think that audience might be good for us," he said. "They're really sort of young, sophisticated people that create manga, which are Japanese comics, and there are huge communities of these people . . . They're creating content. They're not really able to monetize this in any way, but if they had a way to monetize it, they would love to do this full time."

Charles went on to explain that Yours could target the manga community by telling them they can earn real money by creating and discovering new, quality manga. He added that Yours could make sure that their product gave the manga community all of the tools they need to easily post and earn money from their art.

"I don't want to say that manga would necessarily be the first user, but something like that," added Charles. "It's a niche community. It's outside of Bitcoin. Not everyone likes manga, but the people that do like it really like it."

Onboarding New Bitcoin Users via Yours

One last point on the mainstream adoption of Bitcoin and Yours that was discussed on this episode of Epicenter Bitcoin was the issues involved with onboarding new users to this decentralized payment system. "It's still kind of difficult to get [bitcoin]," said Charles. "Wallets have improved a lot over the years, but they're still kind of technically sophisticated."

In the past, traditional online payment options have also had to deal with this onboarding issue. In the case of PayPal, they handled it by literally paying new users to join their platform. "That is not out of the question for us," Charles said, regarding PayPal's strategy. "If we raised a bunch of money, we could do that . . . I don't think we necessarily have to do that though."

It should be noted that those who wish to create or view content do not need to have any bitcoin to use Yours. The use of bitcoin is only required when a user wishes to support someone else's content via a payment.

Charles also mentioned the Coinbase Buy Widget as another easy way to onboard new Bitcoin users. The widget allows users to instantly purchase up to $5 worth of bitcoin per day with limited Know Your Customer restrictions.

"You just have to make it fluid for the users to get on and off," said Charles.

Back to School: Blockchain Education Network to Host Global Bitcoin Airdrop

 

This September, blockchain hubs across North America will be giving out bitcoin to begin the next school year. Over a dozen regions including New York, San Francisco, Chicago and Boston in the United States and Toronto, Montreal, Vancouver and Ottawa, in Canada, are preparing their events. The giveaway, known as a Bitcoin Airdrop, has become a yearly tradition on university campuses.

The bits are to be given to students who come out to their local blockchain club's first meeting. Students will also be introduced to concepts about bitcoin and the blockchain through their peers and a demonstration of a wallet creation and transfer.

History of the Airdrop

The first airdrop was hosted in 2014 by the MIT Bitcoin Club, after the club raised $500,000 worth of bitcoin to give to each incoming freshman. The event was then replicated in 2015 in Montreal by the McGill Cryptocurrency Club during their school's frosh week, with donations given to the club. The Blockchain Education Network is now expanding the initiative throughout their network of regional hubs.

Why an Airdrop?

An airdrop allows people who would otherwise never have heard about bitcoin to try out using their first bits with their friends in a setting where their questions can be answered. Even if a student downloads a wallet and sells the bitcoin, they discover how easily it can be exchanged for fiat currency and would be more open to receiving bitcoin as payment at a future time.

Focus on Education

The Blockchain Education Network (BEN) believes that the blockchain revolution must happen through education. Most people are still unfamiliar with what digital currencies and the blockchain are, though almost everyone is curious when they first hear about it and want to learn more.

Bitcoin and blockchains are technologies with broad socio-economic impacts, which means that different parts of the world will have a different perspectives on it. BEN organizes as a swarm, a decentralized organizational model, to ensure that the education presented at each meeting is relatable to the region.

A Crucial Grassroots Movement for Students

BEN is comprised primarily of students aged 18-25 and the group believes that it is especially important for this demographic to be able to experiment with these technologies. The world is quickly moving into a sharing economy where people can operate remotely and companies have access to a global talent pool. Students will all enter the workforce after graduating and must be familiar with new technology.

Each year, the leadership from a university club graduates and must be replaced by the incoming class of students. Doing an airdrop at the beginning of each school year ensures a strong interest in blockchain technology and many new students joining the blockchain community in every region that participates.

In addition to the airdrop, BEN has an entire Fall 2016 initiative to bring new students into the blockchain ecosystem including a Blockchain Olympics event in October and a Blockchain Startup Gauntlet in November. BEN also hosts and promotes hackathons for students with a variety of skill sets, and assists students who are interested in attending bitcoin and blockchain conferences.

Future Implications

This initiative has become a tradition that can scale as wide as its reach. 500 students receiving bitcoin this September may not change the world; however, each year showing a new group of motivated university students how this technology works may cause a ripple effect of education that reaches farther than our expectations.

In our view, the "blockchain revolution" isn't so far fetched. This is a technology which better maps to our worldviews after having grown up with the internet. It has taken 25 years for the internet to move from creation to our pockets. Through this historical lens, we see any current shortcomings of blockchain as an opportunity for our generation to solve.